GE Updates #4: A Traditional Campaign?

New analysis of the manifestos and their implications for the future of the UK

For all the talk (especially our own) of consensus change, this has largely been a very traditional campaign, one that would not really be out of place at any time in the past thirty years. The terms in which the debates have been fought were exactly as expected – which contributed to a rather boring and, if we’re honest, vapid discussion. And the manifestos, seemingly, confirmed this trend.

The Conservatives have come out with the usual, especially on cutting taxes (national insurance in particular, with a pledge to abolish it for the self-employed and reduce by 2p for the rest), pensions (triple lock plus) and immigration (with some sort of cap on net migration to be set by Parliament). Of course there was the more eye-catching national service pledge, but this has basically been subsumed by messaging on scare stories of higher taxes under Labour.

Similarly, Labour have been concerned with what they are always concerned with: projecting an image of fiscal responsibility by copying the Tories’ fiscal plans for the first years of a parliament (as in 1997), limited tax rises (none on ‘working people’, i.e. VAT, income tax and national insurance) and assuring the country that their primary focus is on economic growth for the whole nation, not pure redistribution.

The manifestos, however, include some interesting policies which suggest this election should be momentous for the political landscape, despite the traditional rhetoric.

The Labour Party

First, a look at Labour. The thing to note here is the how of their approach to economics. It’s light on detail, and that will be where success or failure is determined. But a first look suggests a far more positive approach to the role of government in driving economic growth, their plan for government essentially being ‘we’ll get the ball rolling, and the private sector will take it from there’. In their own words, from the ‘Kickstart Economic Growth’ section of the manifesto: “Public investment, where it supports and de-risks additional private investment, is one important tool being used successfully across the world.” In policy terms, a fairly paltry sum of £7.3bn over the Parliament in a new National Wealth Fund which will have “a target of attracting three pounds of private investment for every one pound of public investment”. But as Steven Fielding, a prominent Labour historian has noted, this approach marks a significant departure from the past decades, and from the Tory attitude of ‘let’s wait for something to turn up’.

In a further sign of this change in attitude to state involvement in the economy, there are significant signs of a turn away from trickle down. A new deal on workers’ rights, though watered down in the last year, still promises to shift power toward workers and unions, as does the promise to rescind the 2016 Trade Union Act. Labour are also signalling a return to a genuine industrial strategy, not only through direct investment but also by introducing carrots and sticks to encourage, or force, businesses to invest in skills training and keeping the effective tax cut for businesses that invest high levels of capital in productivity and wages. And in another of those unsexy policies that may end up being significant, Labour are committed to forcing public bodies to take into account socio-economic inequality, enforcing that part of the 2010 Equality Act for the first time. Altogether, these policy changes mark a major shift in thinking about how to achieve growth, as does their promise to move away from the London-centric model of economy of the past decades through regional devolution and investment.

Of course, the clearest sign Labour are not returning to 1997 is nationalisation. Perhaps because Corbyn successfully brought this concept back to mainstream politics, and perhaps especially because so much has been made of Starmer’s pivot away from his predecessor, it is easy to underrate the significance of Labour’s continuing commitment to public ownership of not only renewable energy, but also the railway network. These would be the first non-emergency nationalisations since the 1970s! Labour today is far more accepting of the state’s position to provide economic leadership and infrastructure than the last time it was in government.

Furthermore, much of this public ownership-industrial strategy focus is to be in industry. From renewable energy led by Great British Energy to £2.5bn invested to save Britain’s steel industry, Labour’s direct investment is to be centred on manufacturing in obvious contrast to the rapid, and then managed, decline of British industry over the past four decades. If one was to estimate, they want a broad shift from the current 80% Service - 20% industrial split in the economy, to something more like 70-30, or possibly more. 

While many of their pledges in these areas are light on specifics and/or poorly funded, this is to be expected in a manifesto and in the current political and economic climate. Debt is sky high as a proportion of GDP, as is the tax burden and borrowing is still too expensive for extensive spending. Importantly, however, these policies could well mark vital shifts in governmental thinking on the economy, a far cry from the ‘Blair without the flair’ marker with which Starmer has been labelled. 

And the thing is, what many misunderstand about consensus shifts, especially in Britain, is that they often do lack flair. It's when politics seems to have run out of ideas that the wiring underneath – the real driver of lasting change – transforms. On the surface Labour’s pledge not to raise taxes on working people is quite reductionist. But Thatcher’s 1979 manifesto (the last agenda-changing election) included very little tax-cutting or monetarist policy. Their main focus was on unemployment – even if they knew that their economic policy would increase it (3.2m+ 1984). The only fundamental sign that Thatcher’s ‘79 manifesto included was a (vague) shift from direct to indirect taxation. This sounds boring, but was quite significant for shifting the tax burden to a wider range of individuals, a core tenet of the Thatcherite revolution and the basis of the jarring tax-and-spend debate we have now.

Labour could be signalling a similar change. Though small-scale thus far, their shift toward intervention and away from trickle down could well be momentous - and as Thatcher knew monetarism would follow, so Starmer may have a clearer idea of what comes after his ‘first steps’ than he is often given credit for. Similarly, a lack of tax rises on working people could signal a larger shift to land and asset tax or a broader reform of the tax system which could include tax cuts / threshold increases for the lower end of the spectrum - which we’ve written about before, and would be the true change to the last decades of British politics, not mere tax and spend within the existing system.

The Conservative Party

Without sounding too unfair, the Conservatives are a good deal less interesting this election – bar their gaffes. A mixture of electoral calculation (targeting their base) and their more laissez-faire attitude to economics has meant their campaign has been centred on cutting tax and red tape, securing pensions, and blaming poor national productivity on a ‘sick-note culture’ in Sunak’s words, on benefit claimants, essentially. What their manifesto does reflect, however, is a number of policy areas where there is an increasing consensus that, in essence, something must be done.

Take childcare, for instance. Stagnant productivity and a declining birth rate makes encouraging people to have children, and return to work afterwards, is an increasingly pressing issue. As such, an extension of free childcare by 15 hours a week for all people, and an expansion of child benefits to some higher earners, has been promised. Similarly, on housing – at least in the rhetoric – the Conservatives paint a similar picture to labour. They aim at 1.6m new homes over the Parliament (ironically 100,000 more than Labour) by cutting regulations and expanding council powers, though this is light on detail and is specified as ‘in the right places’. While important to protect amenity and the environment, this phrase is almost a byword for missed targets – the aim was to reach 300,000 a year (and so 1.5m across a Parliament), but this has been missed by close to a third. As for renters, they promise to abolish Section 21 of the 1988 Housing Act allowing no-fault evictions if re-elected. One may sneer at these pledges akin to Orwellian doublespeak. But if it says something, it's that they know where they need to be: building houses and providing childcare so as to win back the under 50 vote (in which they are 5th place in some polls) and also to create future Conservatives (which housing security / asset ownership naturally does). 

Energy security is another area. In a far cry from Thatcher’s selling off of North Sea oil to pay her unemployment benefit bill, the Conservatives of today speak in very different terms. Instead, Britain is to again become an energy exporter under their plans, not only through fossil fuels but also renewable and nuclear energy (something we also noted could be a core of a new consensus). Like Labour, then, the Tories envision a greater role for industry in the British economy than has been seen for decades.

Consensus?

With some caveats, then, there are some important areas of the Conservative manifesto that represent an emerging political consensus on childcare, energy security and housing to name a few. Of course there will be arguments about these areas – consensus in politics is not about agreement per se, but about a shifting Overton Window (what’s acceptable, or seen as practical, in government). The Tories opposed much of Labour’s postwar welfare state and nationalisation legislation in the 1940s – but kept most of it in the 1950s and had promised much of it prior to the election. As such, this period is known as the ‘postwar consensus’. In many areas, Conservative policy is not so different from that of Labour, in 2024 as in 1945: new windows are being opened. What's different is that, with bold pledges on housing, state economic intervention and energy, Labour seem to at least understand the difficult reforms needed to achieve lasting consensus shift and transformative change. Whether they get there is another story.